The Algeria hostage crisis shows how little it takes in the terms of geopolitical events to cause a spike in oil prices. As problems in the Middle East simmer, along with attacks on oil structure in Africa and a new regime in Venezuela, the number of new uncertainties increases and a sharp rise in crude price becomes more likely by the day.
Those taken hostage, some of whom were killed, worked near a gas facility in eastern Algeria. Oil prices quickly rose to $96 from $93 just three days ago. With the crisis unresolved, so is the problem of what will happen to oil prices. More quietly, at least for now, the amount of oil theft that has gone on in Nigeria has increased as rebels and profiteers steal it. And, in Venezuela, which has nationalized foreign oil interests and given oil away to neighbors, president for life Hugo Chavez is about to die after 14 years as the head of government.
It was unimaginable just a few weeks ago that oil could trade above $100 soon. It is not hard to imagine now.